February 2020 Interest Rates for GRATs, Sales to Defective
Grantor Trusts, Intra-Family Loans and Split-Interest Charitable
Trusts
The February Section 7520 rate for use with estate planning
techniques such as CRTs, CLTs, QPRTs and GRATs is 2.2%, which is
slightly higher than the January rate. The February applicable
federal rate ("AFR") for use with a sale to a defective
grantor trust, self-canceling installment note ("SCIN")
or intra-family loan with a note having a duration of 3 to 9 years
(the mid-term rate, compounded annually) is 1.75%, which is also
slightly higher than the January rate.
The low Section 7520 rate and AFRs continue to present
potentially rewarding opportunities to fund GRATs in February with
depressed assets that are expected to perform better in the coming
years.
